Frequently Asked Questions
What is a living wage?
A “living wage” is the minimum amount that workers must earn to afford basic necessities without public or private assistance. Living wages are intended to meet the basic needs of a single individual working in Orange County, North Carolina.
The living wage for 2020 is $14.90, or $13.40 with employer-provided health insurance.
The federal minimum wage (and current North Carolina state minimum wage) has remained at $7.25 per hour since 2009. The federal minimum wage for tipped workers is $2.13 per hour, which has not changed since 1991.
How do you calculate the living wage for Orange County?
We use the Universal Living Wage Calculation, a widely used and nationally accepted method for determining the living wage for a specific area of the United States. It is based on the U.S. Department of Housing and Urban Development (HUD) standard: no more than 30% of a person’s gross income should be spent on housing. The Universal Living Wage shows how much a worker would need to be paid in order to afford a rental apartment. The consensus of living wage initiatives across the country is to use the Fair Market Rent (FMR) for a one-bedroom apartment.
Accounting for County Variation: Orange County Living Wage uses Durham-Chapel Hill, NC HUD Metro FMR Area data for Chatham, Durham and Orange Counties and Burlington Metropolitan Statistical Area (MSA) data for Alamance to calculate a living wage. Most employees working in Orange County reside in Orange, Durham or Chatham Counties. To account for this preponderance, the average FMR for these counties is weighted at two times the average FMR for Alamance County.
Accounting for Variability in Housing Costs over Time: The use of average Fair Market Rents (FMRs) over the most recent 4 years is a conservative approach and removes the variability of rents over time.
The 2019 Living Wage used by Orange County Living Wage to certify employers is calculated as follows:
|Chatham, Durham, and Orange Counties (Durham-Chapel Hill NC HUD Metro FMR Area)||Alamance County (Burlington MSA)|
|FMR for 1 BR apartment|
|Income needed to allow 30% for rent|
|Annual wage (monthly x 12)||33,789.96||25,479.96|
|Hourly wage (annual/2080hr)||16.24||12.25|
|2020 LIVING WAGE
(Chatham, Durham, Orange hourly wage X 2 + Alamance hourly wage X 1) divided by 3
|2020 LIVING WAGE
If employer provides health insurance
How can I certify my business or organization as a living wage employer?
Employer certification is voluntary, and designated people with the authority to represent your business or organization can apply here. Our main certification criterion is that you pay full and part time employees at least $14.90 per hour, or $13.40 per hour with employer-provided insurance. After you submit your application, our certification team will review it and follow up with you. The application form includes more detailed information on certification qualifications.
Which workers must employers pay a living wage to be certified?
All full and part-time employees must be paid at least the living wage amount. Whether a person works 4 or 40 hours per week, they should be paid the same. A full hour’s work deserves a full hour’s wage.
All tipped, commissioned, and variable pay rate employees must be paid at least the living wage rate. This can include a lower hourly wage rate, so long as tips and commissions, together with the base rate, meet or exceed the living wage.
The following categories of workers are exempt from our certification criteria:
— Apprentices: individuals who are learning a trade, art, or skill through a combination of on-the-job training and related instruction. In exchange for work, they are typically mastering the practical and theoretical aspects of a highly skilled occupation. Typically, apprenticeships include technical or classroom instruction in addition to on-the-job training resulting in a credential that certifies occupational proficiency. Apprentices must be clearly identified by their employer as an apprentice.
— Interns: students or graduates engaged in supervised experiential learning in a professional setting. Internships are of a fixed duration, are established for the benefit of the intern, and have clearly defined objectives related to the professional goals of the intern. Interns must be clearly identified by their employer as an intern. For wage and overtime requirements under the Fair Labor Standards Act, see the Department of Labor definitions here.
— Minors working part-time: employees under the age of legal responsibility working less than 40 hours per week. North Carolina recognizes 18 as the “age of majority,” or the age at which state residents are legally considered adults, as do most other states.
— New hires: employees who are in a probationary period within their first 90 days of employment, during which the employee and employer are evaluating each other.
— Temporary / Project-Based Employees: “as needed” employees who work intermittently and work less than 90 days in a calendar year.
— Independent contractors paid with a 1099 tax form.
— Employees who voluntarily opt out of employer-provided health insurance, or who voluntarily opt out of being paid a living wage by their employer.
If you are an employee of a living wage certified business or organization and have any questions or concerns about your employer’s certification or payment, please submit them to us with the Employee Concern Form.
I am self-employed and have no other employees. Would I qualify?
How long is OCLW’s certification valid? How can I re-certify?
When a business is certified as a living wage employer, their certification is good for two years. Within those two years, a certified employer does not have to raise wages to meet OCLW’s annual living wage increases. However, some employers do raise wages each year to keep pace with the new guidelines. Every two years, when an employer applies for re-certification, they re-certify at the year’s current living wage. Over 90% of employers have recertified when their initial certification expires. Those who don’t are frequently businesses that have closed or moved.
What can I do to support Orange County’s living wage economy?
Support, patronize, and visit our local certified employers! Follow us on Facebook, Twitter, and Instagram for news and updates on our local living wage community, and stay tuned for special events we organize to support our certified employers. Tag us and our certified employers in social media posts to help spread the word about positive change makers in our local economy!